Money Store May Be Put Up for Sale

Money Store Inc., a finance company that makes loans to people with poor credit histories, is considering selling itself, sources familiar with the company said. The Sacramento-based lender, with $2.9 billion in assets, hired Prudential Securities Inc., its longtime advisor, to work on a possible sale, the sources said. Money Store, like some other finance companies, has seen its stock fall amid concerns about accounting practices and the quality of its loans. Its stock, down 27% in the last six months, fell 25 cents to close at $24.50 on the New York Stock Exchange. “The business is not what it used to be, and capital is becoming harder to get,” said Thomas Facciola, an analyst at Lehman Bros. Inc. Unlike banks, which can use deposits to fund their loans, smaller finance companies rely on raising money by packaging loans into bonds for sale to investors. These companies make money by pocketing the difference between the high interest rates they charge borrowers and the lower yields they pay bondholders.